Loading...

Nassim Taleb making case for deflation.

9,466 views

Loading...

Loading...

Transcript

The interactive transcript could not be loaded.

Loading...

Loading...

Rating is available when the video has been rented.
This feature is not available right now. Please try again later.
Published on Jul 7, 2009

In this July 2, 2009 interview on CNBC Nassim Taleb, the author of "Black Swan" book is essentially calling for the government and the privately owned Federal Reserve to stop trying to prop up the deleveraging and let asset prices return to normal valuations.

http://www.cnbc.com/id/31706523

The financial system is crashing and action must be taken by the US government to convert debt into equity to produce a more stable environment, Nassim Taleb, author of "The Black Swan," told CNBC Thursday.


"You may have green shoots, whatever you want to call them, you may have temporary relief, but you are still in a world that's breaking," Taleb said on "Squawk Box."

Anything that's fragile like the financial system will eventually crash, he said.

"We're in the middle of a crash," Taleb said. "So if I'm going to forecast something, it is that it's going to get worse, not better."

The government needs to deleverage debt and not try stimulus packages that will inflate assets, he said.

"What makes me very pessimistic in not seeing any leadership or awareness on parts of government on what has to be done, which is deleverage $40-to-$70 trillion," Taleb said.


"The monkey on our back is debt," he added.

As an example, Taleb said banks should not be sending demands for larger and larger sums from homeowner in arrears on their mortgage. Instead the bank should offer to lower the monthly payments in return for part-ownership of the property.

"People would be able to start from scratch on a healthy basis. You don't want to wait for foreclosure," he said.

Loading...

When autoplay is enabled, a suggested video will automatically play next.

Up next


to add this to Watch Later

Add to

Loading playlists...